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HO CHI MINH CITY: Vacancy rates in Ho Chi Minh City (HCMC) is expected to remain high for the next few years despite promising absorption in the fourth quarter (4Q) 2010, due to the increasing supply, according to Cushman & Wakefield's latest HCMC Office Report.
Cushman & Wakefield estimated new supply of grade A and grade B office space to amount to about 538,195 sq ft and 1.4 million sq ft respectively in 2011. The amount is higher than construction completion in 2010, which registered 398,264 sq ft for grade A and 1.2 million sq ft for Grade B.
Total net absorption for grade A and grade B in 4Q 2010 was 333,681sq ft. Vacancy rate for grade A rose a staggering 19% to 24% in 4Q 2010, while grade B fared much better, declining to 11% from 14% in the preceding quarter.
There were significant new lease transaction in the quarter under review such as TNS lease of 18,298 sq ft at Agrex Building and AstraZeneca leasing 8,611 sq ft at A & B Tower.
The average grade A rental rate continued to fall by 6% in 4Q 2010 but remains almost unchanged for grade B office space when compared to the previous quarter, said Cushman & Wakefield.
The total supply of grade A and grade B office was about 6.5 million sq ft in 2010, while total office supply in other area of the city was unchanged in 4Q 2010.
Considering the slight market recovery, Cushman & Wakefield estimated that the total net absorption in 2011 will be about 2.04 million sq ft.
Cushman & Wakefield estimated new supply of grade A and grade B office space to amount to about 538,195 sq ft and 1.4 million sq ft respectively in 2011. The amount is higher than construction completion in 2010, which registered 398,264 sq ft for grade A and 1.2 million sq ft for Grade B.
Total net absorption for grade A and grade B in 4Q 2010 was 333,681sq ft. Vacancy rate for grade A rose a staggering 19% to 24% in 4Q 2010, while grade B fared much better, declining to 11% from 14% in the preceding quarter.
There were significant new lease transaction in the quarter under review such as TNS lease of 18,298 sq ft at Agrex Building and AstraZeneca leasing 8,611 sq ft at A & B Tower.
The average grade A rental rate continued to fall by 6% in 4Q 2010 but remains almost unchanged for grade B office space when compared to the previous quarter, said Cushman & Wakefield.
The total supply of grade A and grade B office was about 6.5 million sq ft in 2010, while total office supply in other area of the city was unchanged in 4Q 2010.
Considering the slight market recovery, Cushman & Wakefield estimated that the total net absorption in 2011 will be about 2.04 million sq ft.
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